stanton chase study on talent management in swiss npos … · 2016. 7. 8. · with the principles...

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Stanton Chase International (Schweiz) AG, Utoquai 39, CH-8008 Zurich, Switzerland

Telephone: +41 44 256 10 00 Fax: +41 44 256 10 09 Email: [email protected] www.stantonchase.com ______________________________________________________________________________________________________________________________________________________

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Industry Survey on Talent Management in Swiss Non Profit Organizations – Major NPO Human Resources Settings in Terms of the current Talent Management, Search & Retention Strategies

Conducted by Stefan Hofer, Stanton Chase International (Schweiz) AG

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Contents

Abstract .......................................................................................................................................... 1

1. Introduction ............................................................................................................................. 2

2. Employee Profile in Nonprofit Organizations ........................................................................... 2

2.1 Education of NPO employees ....................................................................................... 2

2.2 General profile of qualifications for NPO employees ..................................................... 3

2.3 The most desired new know-how .................................................................................. 4

2.4 Industry background ..................................................................................................... 5

2.5 Requested leadership behavior in NPO business ......................................................... 5

3. Recruitment Process ............................................................................................................... 6

3.1 Greatest challenges in finding new employees ............................................................. 6

3.2 Tools used for new employee recruitment in NPOs ...................................................... 6

3.3 Assessment tools used at NPOs during recruitment processes .................................... 7

4. Human Resources and Talent Management ........................................................................... 7

4.1 Talent training ............................................................................................................... 8

4.2 On-the-job training ........................................................................................................ 8

4.3 Satisfaction surveys ...................................................................................................... 8

4.4 Measures to secure the loyalty of talents ...................................................................... 9

5. Challenges for NPOs ............................................................................................................. 10

6. Summary ............................................................................................................................... 11

7. About Stanton Chase International (Schweiz) AG ................................................................. 11

8. Appendix ............................................................................................................................... 12

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Abstract

The area of nonprofit organizations (NPOs) is currently undergoing a process of transformation in

terms of professionalism. Swiss studies to date have failed to consider the extent to which this

professionalization is having an impact on the recruitment processes and talent management of

NPOs. In order to fill this gap and obtain a better insight into the implications of this transformation

on the HR management of NPOs, the executive search company Stanton Chase International

(Schweiz) AG carried out a qualitative study. This study involved surveying 19 HR managers from

national and international NPOs, and focused particularly on the profiles of NPO employees and

competencies that have been lacking so far, as well as on the recruitment process and talent

retention.

The results are summarized in the case study entitled Industry Survey on Talent Management in

Swiss Non Profit Organizations - Major NPO Human Resources Settings in Terms of the current

Talent Management, Search & Retention Strategies. The evaluation shows that nonprofit

organizations are converging with the private sector (profit organizations, POs) in terms of HR

management, for example in the recruitment process, where NPOs are conducting more and more

structured interviews combined with assessments in their search for employees, a process that is

already well institutionalized in the private sector. Other differences, however, remain. NPOs ask

for soft skills such as diplomacy, political experience, and a congenial personality when recruiting

managerial employees, while companies in the private sector demand straightforward result-

oriented managers.

Finally, it can be concluded that nonprofit organizations are increasingly working in accordance

with the principles of business management, and that HR management is being professionalized

accordingly. In terms of the skill set requirements for the manager of the future, the question is

whether or not the non-profit organizations will converge with the private sector in the foreseeable

future.

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1. Introduction

Some 12,000 foundations, 76,000 associations, and 10,000 cooperatives were active in

Switzerland in 2012. Half of all those NPOs have been founded over the last 10 years – and these

numbers are continuously growing. Until recently, the majority of the work for such ventures has

been carried out by honorary capacities and volunteers – the University of Basel talks about an

equivalent of 80,000 full-time positions – but these days are over. Due to the progression during

recent years – steadily growing number of listings, alignment of statutory obligations, more

demanding requirements – the whole sector has entered a distinctive phase of professionalization.

“Auch Non-Profit-Organisationen arbeiten in Zukunft zunehmend nach betriebswirtschaftlichen

Grundsätzen und rücken damit in der Organisation immer näher an die Profit-Organisationen

heran. Moderne Kommunikationsformen bestimmen Tempo, Transparenz und Regeln der

Zusammenarbeit und verändern Non-Profit-Organisationen mit ihren ehemals geschützten

Bereichen” (“Nonprofit organizations are also increasingly working in accordance with the

principles of business management, coming to resemble profit organizations in their organization.

Modern forms of communication dictate the speed, transparency, and rules of collaboration, and

are transforming nonprofit organizations with their previously protected areas”), comments Hans

Kappeler, Director of Swiss Athletics, regarding this change.

To generate knowledge about the ongoing change in NPO business, Stanton Chase International

(Schweiz) AG, a Swiss leader in executive search, carried out a case study focused on

professionalism in nonprofit organizations and the effect on HR management. “Very little

information was available, not nearly enough to get a clear picture of what is going on in this

success-relevant field of management,” describes Stefan Hofer, Partner at Stanton Chase

International (Schweiz) AG and a practice leader in the areas of government, nonprofit, and

education, the initial situation and his motivation to undertake the survey.

2. Employee Profile in Nonprofit Organizations

In order to ascertain what kind of profile is required for NPO employees, study participants were

asked to specify their needs with regard to educational background, the general profile, the most

desired new know-how, as well as the leadership behavior of employees.

2.1 Education of NPO employees

The survey results show the following priorities for educational background:

1. University/academic degree

2. Politics/international relations

3. Natural sciences

4. Economy/finance/marketing/public relations

5. Law

6. Engineering/technology

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Overall, the respondents agreed on the need for an academic degree. Furthermore, compared to

PO entities, there is a clear difference as the typical “phil. I” and “phil. II” degrees are more

welcomed than the much sought-after business and law degrees in the commercial labor

market.

2.2 General profile of qualifications for NPO employees

Technical competence

“If you need a competent finance manager, you

look for the qualities pursued by all the

conventional companies,” is the often-heard

statement. This shows that on a functional level,

the sought-after skills are the same as in the

private sector. For example, the back-office

administration jobs are technically equal to those

in other businesses – the individual has to know

his craft inside out.

For those organizations that are on the financial

market to raise money for a fund, it is crucial to

have competent people with the relevant

experience and network to find the money.

These kinds of profiles are difficult to find and

normally have a predominantly commercial-

driven background. Differences mainly occur in

terms of the so-called soft skills, when the philosophy clearly differs from the mainstream business

world. Personal characteristics

As soon as a role comprises externally oriented elements, the necessary skill set is distinguished.

Not the typical, natural salesman promises the best results, but rather the more diplomatic,

politically sophisticated, and congenial personality. Furthermore, a talent in the commercial

NPO environment has to be able to combine the industry-specific market awareness with a strong

service attitude, as the members/clients pay him – be it through the membership fee or by buying

special services – for competent support to their businesses. People in these positions need to

have the typical mind-set of a professional service provider in the PO environment. Gregor Saladin,

Director of the Swiss Metal Union, confirms this: “Aus meiner Sicht hat der Non-Profit-Bereich

generell die Herausforderung zu bestehen, aktiv, innovativ und unternehmerisch geführt zu werden

und für seine Mitglieder einen hohen Nutzen zu generieren. Insbesondere bei den gewerblichen

Organisationen ist die Dienstleistungsorientierung das oberste Ziel. Als Aussenstehender erwarte

ich dieses Verhalten auch von den sozialen Non-Profit-Organisationen, die zu wenig über Ihren

Leistungsausweis berichten und deshalb oft bei vielen Spendern keinen Anklang finden. Nutzen-

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und Mitgliederorientierung sowie Transparenz im unternehmerischen Handeln sind die Elemente

dieser Herausforderungen!” (“In my view the nonprofit sector generally needs to overcome the

challenge of generating significant benefits for its members while being managed in an active,

innovative, and entrepreneurial way. In commercial organizations in particular, a service-oriented

approach is the top priority. As an outsider I also expect this behavior from social nonprofit

organizations, which communicate too little about their performance and fail to win many potential

donors. Meeting these challenges calls for an entrepreneurial approach that is oriented toward

benefits and members, and transparency.”) Therefore, a key employee in the humanistic/social

environment needs to be a lot more passionate. A personal corset of values that harmonizes with

the purpose of the organization is fundamental – some call it “helper syndrome,” others “social self-

motivation.” But a requirement for all of them is to be able to endure contradictions – as the

interfaces to the profit world are numerous. Dr. Hanspeter Rentsch, economiesuisse, confirms this:

“Die Non-Profit-Organisationen brauchen eine überragende und unantastbare Glaubwürdigkeit.

Ihre Aktionen müssen ausnahmslos mit ihren Zielen und Policy-Statements übereinstimmen. Wenn

in verschiedenen Bereichen agiert wird, dürfen keine Widersprüche in den Aussagen und im

Handeln entstehen. Die Glaubwürdigkeit und hohen Ansprüche müssen auch in der Auswahl der

Vertreter der Non-Profit-Organisationen und in deren Verhalten zum Ausdruck kommen.”

(“Nonprofit organizations need unquestionable and untouchable credibility. Their actions must,

without exception, be aligned with their goals and policy statements. When actions are undertaken

in various areas, contradictions must not arise among the statements and actions. Credibility and

high standards must also be displayed in the choice of individuals who represent nonprofit

organizations and in their behavior.”)

2.3 The most desired new know-how

As for the most desired new know-how of NPO employees, respondents gave the following

answers:

1. Lobbying

2. Economy

3. IT

4. Project management

5. Humanism

6. Languages

7. Fund-raising

Obviously there is a permanent need to

ensure acceptance and support through

networking specialists, as almost half of the participants would welcome new lobbyists. But only

few respondents said that they watch out for fund-raisers. Fresh money does not seem to be a

weighty problem.

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Project managers are also desired. This reflects the difficulty of gaining international operations

experts for NPOs. No wonder, as these jobs require rare skills and many such jobs are offered by

the private sector, and generally with higher salaries.

2.4 Industry background

It is also important to understand the professional background of applicants as this allows

inferences for a better understanding of the challenges of the recruitment processes and talent

management.

Applicants for NPOs come from the following areas:

1. Private sector

2. Nonprofit organizations

3. Government

4. Education

There is high permeability between PO and

NPO employees. More talents are hired

from the private sector than NPO-

internally. It was often confirmed that many

academics with a humanistic/social

education start their professional careers in

the private sector and at some point join an NPO.

The noticeably low number of changes from government positions to NPOs has repeatedly been

explained by the relatively highly paid and secure employment situation of the public sector

employees.

2.5 Requested leadership behavior in NPO business

The surveyed NPOs informed that the pushy “American approach” would not work. The

leadership has to be participative, transparent, and accompanied by a policy of a long

leash. A successful leader sets good examples and defines intermediate steps on the way to

fulfilling the mission, based on a trusty culture of feedback – but does not attack the autonomy of

the talent’s area of responsibility. “Nonprofit organizations are very often so driven by their mission

that they tend to neglect the inner drivers of the organization. In the long run, people are not

automatically engaged, even if working for a great cause! Therefore self-management and balance

are key to success, for all staff but in particular for staff who are managing people. Leaders need to

set the example by being open to feedback, coaching, and constant dialogue with peers, staff, and

HR, and need to take up the challenge of constantly improving both their understanding of

themselves and their optimal leverage as leaders,” explains Frode Hvaring, Head of Human

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Resources at the European Broadcasting Union (operating Eurovision and Euroradio), regarding

the requested leadership behavior in NPOs.

3. Recruitment Process

With a special interest in the changes in HR management regarding professionalization, the study

examined the recruitment processes of NPOs.

3.1 Greatest challenges in finding new employees

The study also aimed at determining whether NPOs face the same challenges as POs when

searching for new personnel. When hiring new employees, NPOs, in particular, are faced with the

following problems:

1. Quality

2. Salary

3. Quantity

4. Mobility

5. Work-life balance

The survey indicates that NPOs suffer from

the same problem as the commercial

market segment – plenty of CVs but the

expected match is missing. On top of that,

even though salary seems not to be the primary issue, which shows that NPOs are principally able

to compete with the POs in this respect, this might be a reason for the third-most mentioned

challenge: scarcity. Apparently, there are not enough applications to provide employers with an

appropriate choice.

Nevertheless, most interviewees reported that there were no problems in attracting the labor

market. This proves the broadly well-situated employer branding position of NPOs. Obviously, a

large number of employees do not mind switching from a PO job to an NPO function.

3.2 Tools used for new employee recruitment in NPOs

Print media having been the most popular and effective tool to announce vacancies, it appears that

the recruitment methods have evolved. This can be described as a general trend in information

systems. When asked which tools are used for the announcement of vacancies, the respondents

stated the following:

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1. Internet

2. Others such as personal networks, blackboards, speculative applications, etc.

3. Employment agency

4. Executive search

5. Print media

6. Trade fairs

The main difference to POs is the relatively high value of the alternative options for finding

personnel. Many participants confirmed that a lot of applicants are coming through networking and

speculative applications, already involving an (assumed) accordance of values between the job-

seeking candidates and their chosen organization.

In the scope of professionalization and, at the latest, when the “war for talents” reaches the NPOs,

the rate of agencies and direct-search services will most likely increase.

3.3 Assessment tools used at NPOs during recruitment processes

This increasing “war” and therefore also scarcity of suitable applicants pose new challenges for the

recruitment process. NPOs as well as POs need to evaluate their applicants thoroughly. When

asked which tools are most popular for assessments, respondents stated the following:

1. Structured interview

2. Assessment

3. Based on CV

4. Multiple-eye principle

5. Gut feeling

6. References

7. Test work

It is remarkable that a lot of the participants

who regularly prepare structured interviews

are increasingly adding an external

assessment as a secondary tool. A procedure that became usual in the commercial world when it

comes to key recruitments. The user-friendly online solutions provide important leverage for such

processes. A surprisingly low amount of recruiters use references as coverage.

4. Human Resources and Talent Management

Once having hired the right person for the job, training is equally important as a smooth

introduction into the organization and hence a successful execution of the required tasks.

Furthermore, movement of labor is also a challenge for NPOs. This poses the question of which

measures NPOs have institutionalized as talent management after the recruitment process.

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4.1 Talent training

The surveyed NPOs stated the following measures:

1. Active line-management coaching

2. Further-education program

3. Structured introduction program

4. Not relevant

5. Regular communication

6. Mentor

The traditional practice of having the direct superior undertake the new talent’s training applies

here as well. The superior guarantees the development of the beginner through the use of

employees seasoned in the relevant functions, with further-education programs being an additional

tool.

4.2 On-the-job training

What percentage of newly hired talents is able to gain the special requirements on the job?

Survey result:

1. No hire

2.

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recruitment. When asked how regularly they carry out employee satisfaction surveys, respondents

stated the following:

1. Not on a regular basis

2. Once a year

3. Every two years

4. Every three years

Most of the NPOs questioned do not carry out employee satisfaction surveys. There is a proven

relationship between the motivation of the employees and the success of the organization. The

challenge is to take noticeable measures against nuisances. Without this, the employees perceive

the whole exercise as sanctimony – and this leads to the opposite effect of the intention.

Alternative instruments to gain knowledge in this respect are the structured exit interviews.

4.4 Measures to secure the loyalty of talents

All the costly talent recruitment and development activities would come to nothing without a talent-

retention plan. Even more, the competition is salivating for talents that have been expensively

developed somewhere else. However, it appears that NPOs do not carry out many activities to

secure the loyalty of their talents. Answers

of respondents were:

1. Nothing

2. Further-education programs

3. Feedback and personal dialogue

4. Challenging projects

5. Showing appreciation

6. Business trips/congresses

7. Coaching

The majority of the NPOs participating in

the survey do not undertake any talent-

retention activities. In profit-oriented

companies, the HR departments are often overloaded with operational tasks like payroll, personnel

administration, recruitment, etc. – but more and more companies have recognized the strategic

meaning of competent talent management and consequentially hire the relevant HR specialists.

This is also something highly recommended for and also sought after by NPOs, as the following

statement from Catherine Baud-Lavigne, Directrice Adjointe, Chaîne du Bonheur, shows: “In my

opinion, the biggest challenges for the nonprofit sector in Switzerland in the near future reside in

being able to work together and learn from others. Instead of creating new small entities, NGOs

should think about merging activities, thus gaining strength. In such a small country, everyone

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knows everyone in a specific business environment. And many activities are similar, particularly

activities related to human resources. In the humanitarian world for example, Swiss experts and

professionals often work for several NGOs: the NGOs should get together to think about the needs

of their personnel and the ways to improve the support to their staff and experts in the field, in

order to offer them adequate training in line with increasing requirements and difficulty of work.”

5. Challenges for NPOs

However, there are more challenges for NPOs than just recruitment. Kirsi Erofejeff-Engman,

Administrative Director of the European Union of Gymnastics, summarizes them as follows: “Today

Switzerland is a relatively ideal country for the nonprofit sector (federations, associations,

foundations, international institutions, etc.) because it is a neutral country. The taxation is favorable

to the nonprofit sector. Politically Switzerland is sure, stable, and the geographical location in the

center of Europe is good. The immigration policy allows foreigners to come and work in

Switzerland, which is beneficial to the international sector. Almost all sports federations are located

in Switzerland, and the attitude of the country is good for the nonprofit sector.

The challenge is to maintain this situation in Switzerland in the future, especially the political

independence and stability, to assure the economic situation of the country and the favorable

immigration policy.” Gregory Saladin, Director of the Swiss Metal Union, adds regarding HR: “Non-

Profit-Organisationen müssen ihre Marketing- und Kommunikationsinstrumente aktiv betreiben, um

Mitglieder zu gewinnen und zu behalten! Kundenfreundlichkeit, unternehmerisches Handeln nach

betriebswirtschaftlichen Grundsätzen und hohe Dienstleistungsbereitschaft auf allen Stufen sind im

Personalmanagement stark zu gewichten. In diesem Sinne bin ich fest davon überzeugt, dass

auch in den Non-Profit-Organisationen die Personalführung ziel- und leistungsorientiert gefördert

werden muss. Eine noch grössere Herausforderung ist es, die ehrenamtlichen Mitarbeitenden zu

finden. Insbesondere in gewerblichen und industriellen Verbänden ist es wichtig, starke und

mitgliederorientierte Mitarbeitende (MILIZ) zu haben. Sie müssen für ihre Arbeit angemessen

entschädigt werden und mit der Geschäftsstelle harmonisch zusammenarbeiten können. Heute

sind hier sinnvolle Kommunikationsplattformen, Intranet und dergleichen sehr wertvoll und

effizient.” (“Nonprofit organizations simply must actively exploit their marketing and communication

resources in order to gain and retain members! Customer service, an entrepreneurial approach in

line with business management principles, and a high level of service quality at all levels must be

prioritized in HR management. In this regard I strongly believe that personnel management must

also be promoted in a target- and performance-oriented manner in nonprofit organizations. Finding

volunteer staff is an even greater challenge. It is particularly important in commercial and industrial

associations to have strong, member-oriented staff who are suitably compensated for their work

and can work in harmony with the administration office. Today, meaningful communication

platforms, intranet sites, etc., are extremely valuable and efficient.”)

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6. Summary

The study entitled Industry Survey on Talent Management in Swiss Non Profit Organizations -

Major NPO Human Resources Settings in Terms of the current Talent Management, Search &

Retention Strategies shows that increasing professionalization is also advancing in the area of the

HR management of NPOs. As with the private sector, employees are sought primarily via the

Internet, and the focus in the recruitment process is on structured interviews combined with

external assessments.

In addition, there are still areas within the HR management and talent management of NPOs

where the process of professionalization and convergence with the modalities of the private sector

have yet to materialize. The causes of failed recruitment campaigns are not analyzed, for example,

and there are no regular employee surveys. What is more, the majority of the NPOs questioned

have no specific activities aimed at talent retention.

On a fruitful recruitment campaign Executive Search can make a contribution. The so-called

headhunters look out – after a comprehensive briefing and with a precise job description in mind –

for the perfect match out there in the market. They contact relevant individuals directly and inquire

about the profile fit, motivation, and availability. This costs a bit more than an agency, but instead

of having at best one CV that might fit, the headhunter delivers a couple of motivated candidates

with the perfect fit.

The survey identified clear distinctions between NPOs and POs in terms of the profiles of

employees at managerial level. NPOs look for managers who have diplomatic skills, political

experience, and a congenial personality, as well as a transparent, participative management style,

while companies in the private sector demand straightforward result-oriented managers.

Comparing the soft skills called for by NPOs with the profile of the manager of the future compiled

by Stanton Chase International (Schweiz) AG, it could be concluded that the private sector is

aligning itself with the NPOs in this regard. Lucas Schellenberg, Managing Partner at Stanton

Chase International (Schweiz) AG, talks of a New Leadership Model with emotional intelligence

(values, courage, conviction, empathy, altruism), social skills (team spirit, relationships, alliances,

collaboration, communication, virtual worlds), and intellectual competence (creativity, innovation,

passion, broadmindedness) as the essential key points (see Appendix).

7. About Stanton Chase International (Schweiz) AG

Stanton Chase International (Schweiz) AG, a partner company of Stanton Chase International with

70 branches in 46 countries, is the leading Swiss consultancy offering an “executive search service

for entrepreneurs by entrepreneurs.” The partners of the company, which was founded in 2006,

focus solely on exclusive search mandates for strategic management and specialist positions. All

partners are personally, entrepreneurially, and actively involved in day-to-day business, and have

extensive personal experience of company management. This is why the partners of Stanton

Chase International (Schweiz) AG understand board members and CEOs, and are familiar with the

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challenges and burdens they face. In order to meet the needs of clients in highly specialized and

complex sectors, the Swiss executive search company also offers services through industry

specialization. The partners have gained extensive search expertise and experience from business

practice in the respective sectors, and are thus able to deliver their clients the best possible results.

Stefan Hofer, Partner at Stanton Chase International (Schweiz) AG

Stefan Hofer, Partner, joined Stanton Chase International (Schweiz) AG as a partner in 2009. He

works as practice leader in the area of government, non profit, and education, and also contributes

his expertise in the area of consumer and luxury goods.

After completing in his basic studies in law, business management, political science, and

philosophy at the University of Bern and Freie Universität Berlin, followed by a Master’s degree in

HR Management at the International Business School Zurich (ZfU), he spent 14 years working as

an HR manager in various large, globally active companies: following the “Wende” as Personnel

Manager Eastern Europe for an international luxury consumer group, then as Global Head HR for

a leading commodities trading company, and from 2002 as international HR and Recruitment

Executive for key areas at the country, brand, and group levels of the Swiss watch manufacturer

Swatch Group. In 2006, Stefan Hofer set up his own company for management development and

executive search.

8. Appendix

As a Managing Partner at Stanton Chase International (Schweiz) AG, which he co-founded in

2001, Lucas Schellenberg has looked closely at the issue and at the profile of the manager of the

future. This is necessary because the candidates of Stanton Chase International (Schweiz) AG are

not applicants in the classical sense, but rather the best individuals are often not those who are

available on the market. An in-depth understanding of the markets, how they evolve, and the

trends they experience are equally important as professional and rapid access to the most highly

qualified professionals. In this context Lucas Schellenberg defined the profile of the manager of the

future and looked for an answer to the question of which skills a manager would need to bring in

order to be successful in 10 years’ time.

“Weltweit sind neue, komplexere Führungsmodelle nötig, die sowohl emotionale, soziale als auch

intellektuelle Kompetenzen berücksichtigen. Die Manager müssen sich stetig weiterentwickeln, um

den sich verändernden Herausforderungen Rechnung zu tragen” (“New, more complex leadership

models are needed worldwide that take into account emotional, social, and intellectual

competencies. Managers must evolve constantly in order to take the changing challenges into

account”), says Lucas Schellenberg in summary of the key points of his New Leadership Model.

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Globalization will increase further in the future. This is why Lucas Schellenberg sees intercultural competence as the most important skill that managers need to develop further. Intercultural competence refers to the ability to observe differences between various cultures, to learn to understand them and how to deal with them. These differences can be moral, political, or even religious in nature. Language skills can contribute to intercultural competence, but are not of vital importance. The basic prerequisite for developing intercultural competence is respect, which calls for empathy and an understanding of other ways of thinking and behaving.

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